Improved returns for Nordic property funds in Q2 2014

Improved returns for Nordic property funds in Q2 2014

Nordic property funds delivered a total return of 0.7 per cent in Q2 2014, measured in local currency terms, according to the IPD Nordic Quarterly Property Fund Index.

This was above the previous quarter’s total return of 0.5 per cent (Q1 2014), and contributed strongly towards the return for the 12 months ending Q2 of 1.5 per cent.

Nordic property funds underperformed both Nordic property equities, which continued to deliver very strong returns at 5.4 per cent in Q2, and broader Nordic equities, which returned 5.1 per cent in the same period (Euro returns, MSCI).

The five-year period covered by the index has been a challenging time for Nordic property funds, in which they have been heavily outperformed by both broad equities and property equities.

Håvard Bjorå, head of Nordic client consultants, IPD, says: “It is encouraging to see fund performance continue to improve. Even though the aftermath of the credit crunch has been difficult for property funds, we have only recorded three quarters with negative returns since 2009, while 15 quarters have seen positive returns.”

The IPD Nordic Quarterly Property Fund Index consists of 11 contributing funds with a combined GAV of EUR4.6bn at an LTV of 43.5 per cent. National market weightings are tilted toward Norway, which accounts for 40.0 per cent of total gross asset value. The IPD Nordic Quarterly Property Fund Index is sponsored by EY.